BeNew Insurance

AUTOMOBILE INSURANCE Automobile insurance is a financial product that protects car owners from financial loss in case of an accident, theft, or other damage to their vehicle. It also provides coverage for liability claims arising from injuries or property damage caused to others by the insured driver. This will be in exchange for you paying a premium, the insurance company agrees to pay your losses as outlined in your policy. There are different types of auto insurance coverage available, and the specific coverage you need will depend on your individual circumstances, such as the value of your car, your driving habits, the type and value of your car, your driving record, your age, your location, your credit score, minimum insurance requirements of a particular jurisdiction. Here are some of the most common types of auto insurance coverage: 1- Liability coverage: This covers costs associated with injuries or property damage caused to others by the insured driver. It typically co

SURETY BOND A bond in which the surety agrees to answer to the obligee for the non-performance of the principal (known as the obligor). Surety bonds are financial instruments that function like a three-party guarantee. Here's how surety bonds work. The Three Parties Involved: 1- Principal: The person or business who needs the bond and guarantees completing a specific obligation. 2- Obligee: The party requiring the surety bond as a form of financial protection. It can be an individual, government entity, or another business. 3- Surety: The company that issues the bond and assumes the financial responsibility if the principal fails to fulfill their obligations. This is how surety bonds work; If the principal defaults on their obligations as outlined in the bond agreement, the obligee can make a claim against the surety bond. The surety will then investigate the claim and, if valid, pay out the obligee up to the guaranteed amount of the bond. Subsequently, the surety will pursue

PRE-CERTIFICATION AUTHORIZATION (prior authorization, pre-approval, or pre-certification) It is a process commonly used in health insurance plans. It requires approval from the insurer before a specific medical service is provided to the insured patient. A cost containment technique which requires physicians to submit a treatment plan and an estimated bill prior to providing treatment. This allows the insurer to evaluate the appropriateness of the procedures, and lets the insured and the physician know in advance which procedures are covered and at what rates benefits will be paid. Purpose: -Cost Control: Health insurance companies utilize pre-authorization to manage healthcare costs by ensuring that only medically necessary and cost-effective services are covered. -Quality Care: It can also play a role in ensuring appropriate treatment is provided by reviewing if the proposed service aligns with established medical guidelines. -Utilization Management: Pre-authorization is a fo

HELD COVERED A provisional acceptance of risk, subject to confirmation at a later date that the agreed cover is needed. Where applicable to an existing insurance, cover is conditional, in practice, on prompt advice to the Underwriter as soon as the Assured is aware of the circumstances to be held covered coming into effect, and a reasonable additional premium is payable if the risk held covered comes into effect. Extends coverage for a limited period even if a policy provision might have been technically breached by the insured. It essentially acts as a safety net for the insured (policyholder) in case of certain circumstances that might otherwise invalidate their coverage. Example: imagine a cargo ship insured for a specific route. The captain decides to take a slight detour to avoid a reported storm. This deviation technically breaches the policy wording. However, if the captain promptly informs the insurer and the detour is minor, the "held covered" clause might temp

Priority In reinsurance, priority refers to the sharing of losses between the insurer (ceding company) and the reinsurer. It dictates the order in which each party bears the financial burden of a covered loss. There are two main types of reinsurance treaties that utilize priority: 1- Excess of Loss (XL) Reinsurance: Here, the priority is a specific dollar amount (deductible) that the ceding company must pay for each and every covered loss. Scenario: Imagine a reinsurance treaty with a $50,000 excess of loss (XL) clause. If an insured event results in a $100,000 loss, the ceding company would first pay the initial $50,000 (priority/deductible). The reinsurer would then cover the remaining $50,000 2- Stop-Loss Reinsurance: In this type of reinsurance, the priority is an aggregate loss limit for a defined period (e.g., annual). Scenario: Let's say a stop-loss treaty has a $1 million annual loss limit. The ceding company retains responsibility for all covered losses throughout t

SEAWORTHINESS WARRANTY seaworthiness warranty is a crucial promise made by the assured (vessel owner) to the insurer. There is an implied warranty in every voyage policy that the ship must be seaworthy at the commencement of the insured voyage or, if the voyage is carried out in stages, at the commencement of each stage of the voyage. Types of Seaworthiness: 1- Voyage Seaworthiness: The vessel must be seaworthy for the specific voyage it's undertaking, considering factors like route, weather conditions, and cargo being carried. 2- Port Seaworthiness: If the policy applies while the vessel is in port, it should be reasonably fit to encounter the ordinary perils encountered within that port (e.g., strong currents, potential collisions with other docked vessels). To be seaworthy, the ship must be reasonably fit in all respects to encounter the ordinary perils of the contemplated voyage, property crewed, fuelled and provisioned, and with all her equipment in proper working order.

First-party Cyber Liability Insurance First-party cyber liability insurance provides financial assistance to mitigate the impact of data breaches and cyberattacks at your small business. Any business that stores electronic data, especially sensitive customer information, is at risk of cyberattacks. This includes businesses of all sizes and across various industries. First-party cyber liability insurance typically covers: 1- Response Costs: This covers the expenses incurred in responding to a cyberattack, such as hiring forensic investigators to identify the source of the breach, notifying affected customers and data breach regulators, and engaging public relations specialists to manage reputational damage. 2- Business Interruption: If a cyberattack disrupts your normal operations, this coverage can help compensate for lost revenue during the downtime. 3- Data Recovery: The costs associated with restoring lost or corrupted data can be significant. This insurance can help cover th

Retroactive Date A retroactive date refers to a specific date established in a policy that determines the earliest incident for which the policy will provide coverage. It's most commonly found in claims-made policies, particularly those related to professional liability or errors and omissions (E&O) insurance. A retroactive date defines how far back in time a loss can occur for your policy to cover your claim. If a claim happens prior to your retroactive date, your policy won’t provide benefits. It’s a feature of claims-made professional liability or errors and omissions insurance. Example: Imagine you start a professional services business and purchase E&O insurance on July 1st, 2024, with a retroactive date of July 1st, 2023. This policy would cover claims arising from professional mistakes you made on or after July 1st, 2023, that are reported during the policy period (which began July 1st, 2024). Incidents before July 1st, 2023, would not be covered. There are pur

Insurance Quotation An insurance quotation, often simply called a quote, is an estimated cost provided by an insurance company for a specific insurance policy. It outlines the exact terms, conditions, and limitations of the coverage provided. Purpose: -Helps you compare coverage options and pricing from different insurance companies. -Provides a preliminary idea of how much your insurance policy might cost. An Insurance Quote Includes: 1- Coverage Details: A breakdown of the specific protections offered by the policy, including what perils (events) are insured against and any limitations or exclusions. 2- Estimated Premium: The amount you would typically pay periodically (monthly, annually) to maintain the coverage. This might also be broken down into separate charges for different coverages within the policy. 3- Deductible: The initial amount you would be responsible for paying out of pocket in the event of a claim. 4- Policyholder Information: Details like your name, address, a

TAIL This term has been used to describe both the exposure that exists after expiration of a policy and the coverage that may be purchased to cover that exposure. Also known as an extended reporting period. It's an optional add-on applicable to claims-made insurance policies. Example: Imagine you have professional liability insurance (claims-made) for your business. You cancel the policy in December. In February (after the policy cancellation), a client sues you for malpractice based on your work in October (while the policy was active). With tail coverage purchased for your December policy, this claim would be covered. Claims tail may extend for years after policy expiration, and the losses may be covered. It allows you to file a claim against your expired or cancelled policy for an incident that: -Happened during the policy period. -Was not reported before the policy ended. Tail can be applied in the case of a Claims-Made or Occurrence Policies: 1-Claims-Made: Coverage ap

Commercial Auto Insurance Commercial auto insurance is specifically designed to provide financial protection for vehicles used for business purposes. It differs significantly from personal auto insurance in terms of coverage, eligibility, and purpose. Why is Commercial Auto Insurance Required? 1-Higher Risks: Business vehicles are generally on the road more frequently and operate in diverse environments, increasing the risk of accidents compared to personal vehicles. 2-Inadequate Coverage: Personal auto insurance policies typically exclude coverage for business use. 3-Legal Requirements: Many states mandate commercial auto insurance for vehicles primarily used for business purposes. Commercial auto insurance coverages: 1-Liability Coverage: -Bodily Injury: Pays for medical expenses of others injured in an accident caused by your business vehicle. -Property Damage: Covers property damage to others caused by your business vehicle. 2-Physical Damage Coverage: -Collision: Pays for

SUE AND LABOUR A clause provision found in certain policies, particularly: Marine Insurance: Traditionally, this clause originated in marine insurance policies and Property Insurance: It's also increasingly present in some property insurance contracts, including builder's risk and difference in conditions (DIC) forms. The purpose of this clause is to incentivizes the insured party (policyholder) to take reasonable steps to prevent a loss or minimize the extent of damage that has already occurred. The insured has the responsibility to take necessary actions to safeguard the insured property. This could involve: -Taking measures to prevent further damage after an incident (e.g., covering a broken roof with a tarp). -Hiring professionals to mitigate potential losses (e.g., salvaging water-damaged belongings). On the other hand the Insurer has the obligation to adhere to reimbursement: The insurance company agrees to reimburse the insured for reasonable expenses incurred in t

Profit Commission Profit commission in insurance refers to an additional compensation scheme within certain insurance agreements. The Profit Commission could be seen as an incentive from the reinsurer to the Ceding Company that consists in paying back a part of the Treaty profitability. This is to encourage the Ceding Company to a quality underwriting and good management of the Agreement to optimize its profits. The specific formula for calculating profit commission is usually outlined within the reinsurance treaty. It often involves factors like: -Net Premium: Total premium collected after reinsurance costs. -Loss Ratio: Ratio of incurred losses to earned premiums. A lower loss ratio indicates better profitability. Typically, profit commission involves two entities - a reinsurer and a cedant (ceding company). Reinsurers are companies that provide insurance coverage to other insurance companies, while cedants are the insurance companies that transfer a portion of their risks to th

Third-Party Cyber Liability Insurance Ransomware, phishing attacks, and data breaches are continuing to rise impacting more businesses each year. If one of your clients is hacked and sues your business, the resulting legal bills could be devastating. Third-party cyber liability insurance helps ensure that your IT business can survive the financial aftereffects of cybercrime. Scenario 1; Let's say you're an IT consultant hired to help your client step up a security protocol. You recommend antivirus software that has a few recent well-documented weaknesses. When your client's network is compromised and customers' sensitive financial information is stolen, the client blames you and files a lawsuit. Scenario 2; Where Company A, a clothing retailer, stores customer data like names, addresses, and credit card information on their servers. Unfortunately, due to a security flaw in their system, hackers gain unauthorized access and steal this sensitive customer data. At

APPLICATION FORM A form on which the prospective insured states facts requested by the insurance company; and on the basis of which (together with any information from other sources) the insurance company decides whether or not to accept the risk, modify the coverage offered, or decline the risk. The application form serves several purposes: 1- Gathers information: The insurance company uses the application to collect essential details about you, the risk you want to insure, and your situation. This information allows them to assess the risk you represent and determine if they are willing to offer you coverage and at what price (premium). 2- Establishes the basis for coverage: The information you provide on the application forms the foundation for your insurance policy. Any misrepresentations or omissions can have serious consequences, potentially leading to denial of coverage or claims down the road. The application form will request for personal Informations such as your nam

LIABILITY, COLLISION & COMPREHENSIVE These are the three main types of coverage available in an auto insurance policy. Liability pays other people if you’ve injured them or damaged their property. Collision pays to repair damage to your car caused by collisions. Comprehensive pays you for your losses due to theft and other calamities that are unrelated to collisions, such as damage from hail, fire, vandalism, floods, etc. Breakdown for Each; 1. Liability Coverage: -Protects you financially from legal costs and damages if you cause an accident and injure someone else (bodily injury liability) or damage their property (property damage liability). -Minimum limits are required by most states to drive legally. These vary by state, but typically cover a minimum amount for bodily injury per person and per accident, and a minimum amount for property damage. -Consider purchasing higher limits than the minimum required, as medical bills and repair costs can quickly exceed those minim

SCHEDULE The term "schedule" in insurance can have two different meanings depending on the context: 1. Schedule as a List of Details: refers to an attached document that provides additional details about specific aspects of the coverage. It essentially functions as a supplement to the main policy document, offering further clarification and specific information. 2. Schedule as an Exclusion: refer to a specific exclusion listed within the policy wording. This exclusion clause outlines particular situations or circumstances where coverage won't be provided. Example exclusion for pollution or environmental damages. Examples of how "schedule" might be used in this context: (1) A list of specified amounts payable for, usually, surgical procedures, dismemberments, ancillary expenses or the like in Health Insurance policies. (2) The list of individual items covered under one policy as the various buildings or animals and other property in property insurance. (

Minimum Earned Premium A minimum earned premium (MEP) is the lowest amount an insurance company will retain if you cancel your insurance policy before the end of the term. It essentially represents the non-refundable portion of your premium that compensates the insurer for the administrative costs and resources invested in setting up and managing your policy, even if they don't collect the full premium for the entire term. MEPs are more commonly applied to business insurance policies than to personal insurance policies. The minimum earned premium comes into play mainly when a business owner decides to cancel a policy before its expiration date. For example, say you have a $500 premium on a one-year policy, and at the six-month mark, you decide to cancel coverage. If the insurance company has no minimum earned premium in place, it would refund you the remaining premium. In this case, that would be $250, half of the $500 premium. But if the company has a minimum earned premium o

Admitted vs. Non-Admitted Insurance Carriers An admitted insurance company has been approved by a territorial insurance regulator or the state , whereas a non-admitted insurance company is not backed by the the regulator/state. An admitted insurance company is backed by the state/regulator, which means: -The insurance company must comply with the regulations set by your insurance regulator. -If the insurance company fails financially, the state/regulator will step in to make payments on claims as necessary. A non-admitted insurance company does not necessarily comply with insurance regulations. If the insurance company becomes insolvent, there is no guarantee that claims will be paid, even if the case is active at the time of the bankruptcy or financial failure. If policyholders think their case was handled improperly, they can’t appeal to the insurance regulator/department inchaeged of insurance. For example, buying from a non-admitted carrier may be beneficial for businesses

Care, Custody, or Control Care, custody, and control is an exclusion in general liability and commercial auto insurance policies that removes coverage for someone else’s property that is damaged while in your possession. Here's how it works: Imagine a construction company borrows a client's jackhammer to complete a project. During the work, the jackhammer is accidentally damaged. The construction company's general liability insurance policy likely includes a CCC exclusion. This means the insurance will not cover the cost of repairing or replacing the damaged jackhammer as it belonged to the client and was under the construction company's care and control at the time of the damage. Your general liability or commercial auto insurance normally pays for damage you cause to another person’s property. However, if that property is temporarily in your safekeeping (for example, leased equipment used in your business), your insurance policy won’t pay the property owner for a